Not upheld: unfair credit relationship under Section 140A of the Consumer Credit Act 1974; misrepresentation under Section 75 of the Consumer Credit Act 1974; alleged breach of Regulation 14(3) of the Timeshare Regulations 2010; undisclosed commission arrangements complaint against Shawbrook Bank Limited

Decision detail

Summary

Mrs A complained that Shawbrook Bank Limited acted unfairly by being party to an unfair credit relationship and by rejecting her Section 75 claim regarding a Fractional Club timeshare membership purchased in June 2014 for £8,260. The professional representative alleged the supplier misrepresented the membership as an investment, guaranteed an end date, and exerted undue pressure, and that the lender failed to conduct proper affordability checks and failed to disclose commission arrangements. The ombudsman found no persuasive evidence of actionable misrepresentation, rejected claims of undue pressure given the complainants' extensive timeshare experience, and concluded that even if the supplier breached Regulation 14(3) by marketing the membership as an investment, this was not material to the purchase decision. The commission of £826 (5.41% of charge for credit) was not excessive, and Mrs A had sufficient information to understand the cost of credit. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found no persuasive evidence of actionable misrepresentation regarding the investment nature, guaranteed end date, exclusivity, or necessity of the purchase. While acknowledging the supplier may have breached Regulation 14(3) by marketing the membership as an investment, the ombudsman concluded this was not material to Mrs A's decision, as she and Mr A were experienced timeshare members who would have proceeded regardless. The commission of £826 (5.41% of charge for credit) was not excessive compared to the Supreme Court's threshold in Hopcraft, Johnson and Wrench, and Mrs A had sufficient information to understand the cost of credit. The professional representative's allegations were found to be generic and unsubstantiated, lacking direct testimony from Mrs A herself. The ombudsman rejected claims of undue pressure, noting the complainants' experience and prior attendance at sales events where they had declined purchases.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website